World Food Prices at Record High: Climate Crisis Expected to Worsen the Trend

The FAO Food Price Index rose to 131.1 points in July, the highest level since January 2023, driven by grains, wheat, and sugar. The UN warns that wars in Iran and Ukraine, extreme weather, and energy costs could exacerbate the increases. Meat and dairy prices fell.

The Food Price Index of the UN's Food and Agriculture Organization (FAO) rose to 131.1 points in July, up from 130.3 points in June, the highest level since January 2023. The increase was led by the grains index, which climbed 3.4%, and wheat prices surged 5.8% due to concerns over disruptions to exports from the Black Sea region and heat damage to crops. Vegetable oil prices also rose 2%, and sugar prices climbed 5.6% due to weather concerns in Europe and Asia and demand for ethanol in Brazil. In contrast, meat prices fell 2.8% and dairy product prices fell 0.7%. The FAO's chief economist warned this week of a new wave of food inflation due to wars in Iran and Ukraine, rising energy costs, fertilizer supply difficulties, and the El Niño phenomenon. Some of the impact on consumer prices is expected to materialize later this year and during 2027.